EU Investigates Corning for Potential Antitrust Violations

The European Commission has initiated an antitrust investigation targeting Corning over potential anticompetitive practices in its agreements related to the supply of cover glass for electronic devices.

Corning

Corning is a global leader in glass manufacturing, providing materials for a wide range of industrial and consumer applications. One of its flagship products is Gorilla Glass, a popular choice for many leading smartphone manufacturers, including Apple.

While Corning’s Gorilla Glass is known for its exceptional resistance to damage, the EU is now questioning the company’s methods of maintaining its market position. The investigation centers around whether Corning may have engaged in practices that unfairly limit competition.

According to the Commission, there are concerns that Corning has potentially violated Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position in the market.

The Commission has outlined several specific practices that are under scrutiny:

  • Exclusive Sourcing Obligations: Corning may have required OEMs to source most, if not all, of their Alkali-AS glass needs exclusively from Corning. This could restrict the ability of mobile phone manufacturers to choose alternative glass suppliers, limiting competition.
  • Exclusivity Rebates: Corning allegedly offered rebates to OEMs that complied with the exclusive sourcing agreements. These rebates, tied to exclusivity, could create an unfair market advantage by incentivizing OEMs to stick with Corning instead of exploring competitive options.
  • English Clauses: In certain contracts, Corning included clauses that required OEMs to inform the company of any competitive offers. Corning then had the opportunity to match those offers, further entrenching its market position.

Corning Bendable

The Commission is concerned that these practices may have had far-reaching consequences. By locking OEMs and finishers into exclusive agreements, Corning could have effectively shut out rival glass manufacturers from large portions of the market.

The EU has, however, stressed that the opening of a formal investigation does not imply guilt, but rather initiates a thorough examination of the case.

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It's Me
It's Me
1 year ago

One of those accusations sound like they did anything wrong.

EU proving they only know how to kill businesses and innovation.

Léon
Léon
1 year ago

All 3 practices listed above may not be palatable to some but I don’t see Corning forcing anybody to accept the terms. It’s the business interest and profit that motivate other side to accept those terms. They are free to reject the obligation to source the majority of their glass needs from Corning and to try to get it from someone else. They may have to pay more or get inferior quality but no one is preventing them from looking for alternatives.

With exclusivity rebates Corning is awarding customer loyalty. They are entitled to give price breaks to whomever they see fit, for whatever reason; they may just like the customer or might be trying to acquire the new one by offering price breaks as a welcome gesture. Again, the customer is not forced into exclusive agreements, they are free to explore the other options from the competition. If they find them more attractive, they are free to switch to another supplier. Unless they’ve already signed binding contract with Corning, which they did presumably out of their own business interests and not because they were forced to.

And what is wrong with trying to keep the customer by asking for an opportunity to match the competition’s offer? If that is a contract clause, it may be seen as a forced obligation but nobody forced the customer to accept that obligation by signing the contract in the first place.

One thing is fighting the unfair business practices of actively undermining the competition but this seems more like a part of a trend to punish the most successful companies for being more successful than the rest.

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